TY - JOUR
T1 - Coffee, economic fluctuations and stabilisation
T2 - An intertemporal disequilibrium model with capital market imperfections
AU - Otero, Jesús G.
N1 - Funding Information:
I would like to thank Diego Escobar, Ana Marı́a Iregui, Neil Rankin, and participants at the 1998 Latin American Meeting of the Econometric Society in Lima, Peru, for helpful comments and suggestions. I am also grateful for the valuable comments and suggestions of two anonymous referees. Financial support from the Fundación para el Futuro de Colombia — Colfuturo, the British Council and the Banco de la República is acknowledged. Any remaining errors are my own responsibility.
PY - 2000/6
Y1 - 2000/6
N2 - This paper develops a two-period disequilibrium model of a small open economy under Keynesian unemployment to analyse the effects of temporary, anticipated, and permanent coffee price shocks. The model includes a government sector that administers a commodity price stabilisation fund, and allows for capital market imperfections. The type of capital market imperfection makes an important difference to the results of the model. In particular, when the government borrows on more favourable terms than individuals, the coffee price stabilisation fund reduces the multiplier effects of temporary and permanent shocks not only in the first, but also in the second period. By contrast, when individuals face an upward-sloping supply of capital curve, the stabilisation fund shifts some of these effects from the first to the second period. (C) 2000 Elsevier Science B.V. All rights reserved.
AB - This paper develops a two-period disequilibrium model of a small open economy under Keynesian unemployment to analyse the effects of temporary, anticipated, and permanent coffee price shocks. The model includes a government sector that administers a commodity price stabilisation fund, and allows for capital market imperfections. The type of capital market imperfection makes an important difference to the results of the model. In particular, when the government borrows on more favourable terms than individuals, the coffee price stabilisation fund reduces the multiplier effects of temporary and permanent shocks not only in the first, but also in the second period. By contrast, when individuals face an upward-sloping supply of capital curve, the stabilisation fund shifts some of these effects from the first to the second period. (C) 2000 Elsevier Science B.V. All rights reserved.
UR - http://www.scopus.com/inward/record.url?scp=0034211012&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0034211012&partnerID=8YFLogxK
U2 - 10.1016/S0304-3878(00)00077-8
DO - 10.1016/S0304-3878(00)00077-8
M3 - Article
AN - SCOPUS:0034211012
SN - 0304-3878
VL - 62
SP - 105
EP - 129
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -
